Filed under: Accountable Care Organization, Medical Home, Medicare & Medicaid
In The Quiet Health-Care Revolution, an article by Adrian Slywotzky and Tom Main in the November issue of The Atlantic, the authors tell the story of CareMore, a for-profit company serving more than 50,000 elderly patients through 26 care centers located in Arizona, California, and Nevada. Founded by Sheldon Zinberg, a gastroenterologist, CareMore was originally a group physician practice but it has since become a Medicare Advantage managed care plan. As such, it is paid a capitated, risk-adjusted rate for each patient it serves, giving it a financial incentive to hold down costs. Slywotzky and Main report that, through an emphasis on care coordination and creative “upstream” interventions, CareMore has improved outcomes, held down costs, and stayed in the black.
Each CareMore patient has a personal physician, called an “extensivist,” who ensures, with the help of an electronic medical record, that all of the members of the patient’s care team are communicating and coordinating with one another. The extensivist is also charged with ensuring that the patient understands and is able to comply with his or her treatment plan. One of Dr. Zinberg’s early decisions was that “noncompliance is our problem, not the patient’s.” As a result, among other things, CareMore provides its patients with free-to-them transportation to medical appointments.
Going hand-in-hand with CareMore’s emphasis on coordination is a focus on “upstream” interventions. For a patient with congestive heart failure, a wireless scale transmits the results of her daily weigh-in to a clinic allowing fluid build-up to be caught early. For a frail patient, “light muscle-training sessions and periodic toenail clipping” reduce the risk of falls. And for a diabetic patient, aggressive treatment of a cut foot reduces the risk of infection and amputation.
How does all of this impact quality and cost? Slywotzky and Main report that:
“CareMore, through its unique approach to caring for the elderly, is routinely achieving patient outcomes that other providers can only dream about: a hospitalization rate 24 percent below average; hospital stays 38 percent shorter; an amputation rate among diabetics 60 percent lower than average. Perhaps most remarkable of all, these improved outcomes have come without increased total cost. … CareMore’s overall member costs are actually 18 percent below the industry average.”
As with other, better known providers like the Mayo Clinic, whether the CareMore model is scalable is a question, one that may be answered in coming years because the company is growing and is likely to grow more after its purchase in August by WellPoint.
In a recently-released study conducted for AHIP–the industry group representing health plans–Kenneth Thorpe makes the financial case for enrolling more individuals, in particular those who are eligible for both Medicare and Medicaid, into health plans like CareMore that employ a coordinated, team-based approach to care. As Thorpe explains, so-called “dual eligibles” are among the most chronically ill and therefore expensive of all patients, accounting, despite their relatively small numbers, for “36 percent of total Medicare spending and 39 percent of Medicaid spending.” In 2011, Thorpe writes, “the federal government–through Medicare and Medicaid–will spend over $230 billion on dual eligibles.” Currently, “[f]ewer than 2 percent of dual eligibles are enrolled in a coordinated care program that managed all Medicare and Medicaid covered benefits.” Thorpe projects that if all dual eligibles were required to enroll in such a program, the federal government would save up to $125 billion and the states up to $34 billion over the next ten years.
Achieving better alignment of Medicare and Medicaid for the benefit of dual eligibles is not without its complications, of course. Yesterday, AHIP issued a proposal reviewing key differences between the programs-including the nature and scope of covered services, eligibility and enrollment rules and procedures, provider networks and access requirements, and beneficiaries’ right to information and to appeal-and recommending ways to eliminate or work around them. Among AHIP’s recommendations is that “States be given opportunities to share with the Federal government and with health plans, as appropriate, in savings generated through increased integration.” As it stands, “it may be difficult for States to justify State investment in efforts to generate such savings, for example through programs intended to decrease acute hospitalizations or increase reliance on Medicaid-covered [i.e. partially State-funded] services.”
Filed under: Cost Benefit Analysis, Cost Control, Drug Pricing, Drugs & Medical Devices, Economic Analysis of Health, Health Reform, HHS, Hospital Finances, Medicare, Medicare & Medicaid, Social Justice, Taxation
One rare point of elite consensus is that the US needs to reduce health care costs. Frightening graphs expose America as a spendthrift outlier. Before he decamped to Citigroup, the President’s OMB director warned about how important it was to “bend the cost curve.” The President’s opponents are even more passionate about austerity.
Journalists and academics support that political consensus. Andrew Sullivan calls health spending a “giant suck from the rest of the working economy.” Gregg Bloche estimates that “the 30% of health care spending that’s wasted on worthless care” is “about the price of the $700 billion mortgage bailout, squandered every year.” He calls rising health spending an “existential challenge,” menacing other “national priorities.” Perhaps inspired by Children of the Corn, George Mason economist Robin Hanson compares modern medicine to a voracious brat:
King Solomon famously threatened to cut a disputed baby in half, to expose the fake mother who would permit such a thing. The debate over medicine today is like that baby, but with disputants who won’t fall for Solomon’s trick. The left says markets won’t ensure everyone gets enough of the precious medical baby. The right says governments produce a much inferior baby. I say: cut the baby in half, dollar-wise, and throw half away! Our “precious” medical baby is in fact a vast monster filling our great temple, whose feeding starves our people and future. Half a monster is plenty.
But when you scratch the surface of these sentiments, you have to wonder: is the overall level of health care spending really the most important threat facing the country? Is it one of the most important threats? There are many ways to raise revenue to pay for rising health costs. Aspects of the Affordable Care Act, like ACOs and pilot projects, are designed to help root out unnecessary care.
I am happy to join the crusade against waste. But why focus on total health spending as particularly egregious or worrisome? Let’s explore some of the usual rationales.
Terrible Tax Expenditures and Suspect Subsidies?
Employment-based insurance gets favorable tax treatment, and much Medicare and Medicaid spending is drawn from general revenues. So, the story goes, medicine’s big spenders don’t have enough “skin in the game.” Once health and wealth are traded off at the personal level (as the Harvard Business School’s Clayton Christensen advocates), people will be much less likely to demand so much care. Government can attend to other national priorities, or individuals will enjoy higher incomes and will be free to spend more.
I respect these arguments to a point, but I worry they partake of the “nirvana fallacy.” If I could be certain that leviathan would repurpose all those wasted health care dollars on infrastructure, or green energy, or smart defense, or healthier agriculture, I’d be ready to end tax-advantaged health insurance in an instant. But I find it hard to imagine Washington going in any of these directions presently.
Giving tax dollars back to taxpayers also sounds great, until one processes exactly how unequal our income distribution is. In 2004, “the top 0.1% — that’s one-tenth of one percent — had more combined pre-tax income than the poorest 120 million people.” To the extent health-related taxes are cut, very wealthy households may see millions per year in income gains; the median household might enjoy thousands of dollars per year. Sure, middle income families will find important uses for those funds (other than bidding up the price of housing and education). But at what price? What if the insurance systems start collapsing without subsidies, and more physicians (who are already expressing a desire to work less) start seeking out pure cash practices? A few interactions with the the very wealthy may be far more lucrative than dozens of ordinary appointments.
Consider the math: billing a $20,000 retainer from each of 50 millionaires annually may be a lot more attractive to physicians than trying to wrangle up 500 patients paying $2000 each—or, worse, getting the money from their insurers. There are about 10 million millionaires in the US; that’s a lot of buying power. One $10,000 score by a cosmetic dentist from such a client could be worth 400 visits from Medicaid patients seeking diagnostic procedures. Providers are voting with their feet, and a Medicaid card is already on its way to becoming a “useless piece of plastic” for many patients. Given those trends, simply reducing health care “purchasing power” generally risks some very troubling outcomes for the very people the health care cost cutters claim to protect. No one should welcome a health care plutonomy, where the richest 5% consume 35% of services, regardless of how sick they are.
Is Anyone Underpaid in Health Care?
Health commentators rightly draw attention to big insurer CEO paydays. Top layers of management at hospitals and pharma firms are also getting scrutiny. Wonks are up in arms about specialist pay. Read more
Filed under: Accountable Care Organization, Children, Medicare & Medicaid
Late last year, the American Academy of Pediatrics (AAP) issued a report recommending that pediatricians screen new mothers for postpartum depression during the 1-, 2-, 4-, and 6-month well baby visits. Most pediatricians believe that screening for postpartum depression is within the scope of pediatric practice, because “[a]ddressing maternal depression in a timely and proactive fashion is essential to ensure healthy early brain and child development and readiness to succeed.”
There has been some debate about whether such screening is reimbursable. The AAP believes that it is (or should be) and recommends that pediatricians seek reimbursement using “[t]he Current Procedural Terminology (CPT) code 99420 [for "Administration and interpretation of a health risk assessment instrument"] … recognizing the [Edinburgh Postpartum Depression Scale (a 10-question screen completed by the mother)] as a measure for risk in the infant’s environment, to be appropriately billed at the infant’s visit.”
Because it would be integrated into a reimbursable well visit, and because of the limited amount of time it takes, reimbursement concerns may not be an insurmountable barrier to postpartum depression screening. (Even more streamlined than the Edinburgh Scale is a two-question screening tool that, while not specifically designed for use with new mothers, has proved effective at identifying postpartum depression. The two questions are as follows: “Over the past 2 weeks: 1. Have you ever felt down, depressed, or hopeless? 2. Have you felt little interest or pleasure in doing things?” Answering yes to one or both of these questions is a positive screening result.)
When the screening identifies a potential problem, though, reimbursement concerns likely are a formidable barrier to treatment delivery. The AAP acknowledges that pediatricians are not qualified to treat postpartum depression (and many mothers might not want them to in any event) and recommends that pediatricians refer new mothers with positive screening results to qualified providers and other resources in their community. This recommendation is a good one, as far as it goes, and probably all that can be expected in our current fragmented healthcare system, but it is a long way from ideal, whether you put yourself in the shoes of the provider– or the family.
Might the much-talked-about accountable care organization be a means to the end of fairly compensating pediatricians and their staff for the hard work entailed in quickly and seamlessly moving mothers into care? Just as Section 3022 of the Patient Protection and Affordable Care Act allows adult medical providers to form ACOs for the purpose of receiving incentive payments tied to savings to Medicare, under Section 2706 states can allow pediatric medical providers to form ACOs to receive payments tied to savings to Medicaid. While the AAP claims that “[g]reater savings are found in managing care for adults and not children[,]“ Nationwide Children’s Hospital in Columbus, Ohio, the “largest pediatric accountable care organization in America,” disagrees, claiming that “[p]ediatrics offers perhaps the biggest opportunity to bend the long-term cost curve in health care. While the savings may be less immediate, there is evidence that many of the pervasive, and costly, chronic diseases of adulthood can be successfully prevented in childhood, for example obesity.”
Providers establishing pediatric ACOs will need to confront a number of pediatric-specific structural issues. As Mark Waxman and Larry Vernaglia point out in a recent Health Law Reporter article, while “children grow out of childhood and, therefore, potentially the [pediatric ACO] structure[,]” many conditions are “best treated by the same team over the life of the individual.” In addition, “pediatric populations do not exist in vacuums; generally, they live in families and these families also receive medical care. A [pediatric ACO] may need to coordinate closely with an ACO that provides care to the entire family. … For example, if wellness programs were targeted at the whole family (e.g. nutrition, exercise, environmental, etc.) they likely would be more effective than if they address the child in isolation.” Postpartum depression is just one of many conditions that call for care coordination not just on the patient’s behalf but also on the patient’s family’s behalf– and pediatric ACOs should be structured with this in mind.
Filed under: Medicare & Medicaid, State Initiatives
I can’t read another paean to Mississippi Gov. Haley Barbour for granting a release from imprisonment to Gladys Scott on condition that she “donate” a kidney to her sister.
The Scott sisters were sentenced to life 16 years ago for an armed robbery that yielded them $11. The women will be eligible for parole in 2014.
Civil rights advocates have sought the two women’s release for some years, arguing that their sentences were excessive.
Barbour’s decision has been hailed by the NAACP President and CEO as “a shining example of the way a governor should use the power of clemency.” A primary reason cited by Barbour for his decision is that sister Jamie’s dialysis is costing the state a lot of money. According to Gladys Scott’s attorney, the idea that she donate a kidney to her sister was her own, which is why he included it in the petition for release.
While available reports do not provide sufficient facts for robust legal-moral analysis, this story raises issues that should give us pause.
First and foremost, I am concerned on Gladys Scott’s behalf that a kidney donation is in neither her short- or long-term best interests – I can only wonder whether her own health makes her an ideal donor after serving a 16-year prison sentence.
We don’t know what led to Jamie’s end-stage renal disease, but it is crucial that Gladys know what her own risk for the disease is before she gives up a healthy kidney. Will her physicians feel comfortable recommending against the surgery if her long-term prognosis is poor – would such a decision result in the revocation of the prison release, or is the release contingent upon a medical “OK” for the procedure?
To what extent will the transplant physicians be required to compromise their own ethical duties to the health of these women to accommodate their desire for freedom?
Hopefully, Barbour’s release decision depends upon Gladys’ willingness to be considered as an organ donor, as opposed to her having to actually go through with it.
While I believe it possible that Gladys wishes to donate her kidney to save her sister’s life, the conditions under which she has made this decision are hardly ideal to voluntariness, which our law normally dictates is a necessary condition precedent to organ donation.
These women have been incarcerated their entire adult lives, and have likely made very few decisions on their own behalf, much less life-and-death ones.
Other doubts haunt this scenario. If indeed the Scott sisters merited a suspension of their sentences because they are excessive, then the governor should have made his decision for that reason, thereby enabling the women to resolve how to proceed in addressing Jamie’s kidney failure in the context of their private lives, without state compulsion and outside the glare of the media.
I hope they have significant and stable support upon their release – in addition to undergoing a significant medical procedure, they may not be well-prepared for successful reentry even in the best of circumstances.
Barbour cites the opportunity to save the state health costs by releasing the sisters to pursue the transplant. If the transplant is both a cost-effective and humane alternative to dialysis (which I believe it is) why wasn’t it allowed during the sisters’ incarceration?
While the state may be expecting to save money for the sisters’ health care, it is presumably Medicare that will be covering the cost of the transplant and the extremely expensive post-surgical anti-rejection drugs that Jamie will require (although Jamie’s eligibility for Medicare will likely be fraught with hurdles).
Thus, a large part of the state’s motivation here seems to be the chance to shift Scott from the state’s Medicaid roll to the federal government’s Medicare program.
A fragmented system
While this might work out in the end for the Scott sisters, it represents yet another perversity of our fragmented health care system.
The Scott sisters must be wonderfully excited about their imminent release, and the possibility of saving Jamie’s life, and I am pleased for them.
I am less excited, however, about Barbour’s decision becoming a precedent for other governors.
This article originally appeared in The Record, New Jersey’s most awarded newspaper.
Filed under: Fraud & Abuse, Health Reform, Medicare & Medicaid
On December 15, 2010, President Obama signed the Medicare and Medicaid Extenders Act of 2010 (the Medicare Physician Pay Fix Bill). In addition to its one-year delay of a 25% cut in Medicare reimbursements to physicians, the act repeals § 6502 of the Patient Protection and Affordable Care Act which would have become effective on January 1, 2011. This move stands in stark contrast to a recent trend toward increased individual liability, specifically the increased exclusion of individuals from federal healthcare programs for fraud and abuse violations.
The federal government, through the Department of Health & Human Services Office of the Inspector General (OIG), has increased its focus on individuals, with exclusions for fraud and abuse violations. As previously reported, OIG released an internal advisory document on October 20, 2010, setting out nonbinding factors for permissive exclusions under § 1128(b)(15) of the Social Security Act. The new Guidance changed the permissive exclusion standard to a quasi-mandatory standard, by creating a presumption in favor of exclusion when an individual exercises ownership, operational or managerial control over a sanctioned entity and there is evidence that such individual knew or should have known of the prohibited conduct.
OIG swiftly acted on the new Guidance by excluding Marc S. Hermelin, Chairman of the board and majority shareholder of K-V Pharmaceutical. As a result, K-V announced on November 17, 2010 that Hermelin had resigned and agreed to divest himself of all K-V stock. On December 7, 2010, Gregory E. Demske, Assistant Inspector General, announced that the exclusion of Hermelin was “preview of things to come.”
Further, on November 9, 2010, former GlaxoSmithKline Vice President and Associate General Counsel Lauren Stevens was charged with obstruction of justice and making a false statement in response to a Food and Drug inquiry. Michael W. Peregrine, with McDermott Will & Emery LLP, told BNA that, “the Stevens prosecution is a piece of a broader puzzle based in part on the responsible corporate officer doctrine and reflects the government’s heightened interest in fostering individual accountability and that is consistent with other recent attempts by prosecutors to target individuals they believe are responsible for corporate misconduct.”
Section 6502, which was repealed on December 15, would have continued the trend toward increased individual liability. It would have mandated state Medicaid agencies to exclude an individual or entity that “owns, controls, or manages” a Medicaid-participating entity that:
- Has delinquent, unpaid Medicaid overpayments
- Is suspended or excluded from participation in Medicaid, or
- Is affiliated with an individual or entity that has been suspended or excluded from participation in Medicaid
The Medicaid exclusion authority of § 6502 is different than § 1128(b)(15) of the Social Security Act. Unlike § 1128(b)(15), which provides for permissive exclusion from all federal health care programs, § 6502 would have provided for mandatory derivative exclusion from Medicaid only. Laurence Freedman, an attorney with Patton Boggs told BNA that “this mandatory Medicaid exclusion needed to be repealed to avoid a broad, and I believe, unintended impact. It would have reached former executives or board members of excluded subsidiaries, for example.”